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Health Care Reform Challenges Continue from Many States

April 1, 2010 at 12:00 AM EDT
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With 14 state governments suing over health care reform, Judy Woodruff gets opposing views about the constitutionality of the new federal law.

JUDY WOODRUFF: The debate over the merits of health care reform may be over here in Washington, but a different sort of debate is taking shape around the country over the question, is it constitutional?

Well before President Obama signed the national health care overhaul into law, opponents at the state level were preparing a challenge in federal court. Florida’s attorney general, Republican Bill McCollum, has been joined by his counterparts in 13 other states. All but one are Republicans, and several are running for governor.

The crux of their case: The mandate that Americans buy insurance is a violation of the U.S. Constitution’s Commerce Clause.

BILL MCCOLLUM, Florida attorney general: The freedoms of Americans, and particularly in my state of Florida, were impaired by this bill. And it forces people to do something in the sense of buying a health care policy, or pay a penalty, a tax or a fine, that simply, the Constitution doesn’t allow Congress to do.

JUDY WOODRUFF: Under the law, most Americans must have health insurance by 2014, or pay $95 or 1 percent of their income, whichever is greater. By 2016, the penalty increases to $695 or 2.5 percent of income.

On Tuesday, more than 250 people rallied in Montgomery, Alabama. They called for amending the state constitution to supersede the federal plan. More than 30 other states are considering similar opt-out clauses.

And Virginia has already passed one. Because of that, Virginia’s attorney general, Republican Ken Cuccinelli, has filed a separate lawsuit against the federal government.

KENNETH CUCCINELLI, R, Virginia attorney general: I’m doing exactly what I said I was going to do when I ran for office. And I got more votes then anybody ever running for attorney general before in Virginia history. The people of Virginia knew what they were getting when they elected me.

JUDY WOODRUFF: When President Lyndon Johnson signed Medicare into law 45 years ago, it, too, ran into opposition from the states, in some cases because it required racial integration of publicly funded hospitals.

Those challenges failed, and many legal scholars say this new batch of state lawsuits will fare no better. And, at the White House, presidential aides maintain none of the cases bears any legal merit.

ROBERT GIBBS, White House press secretary: For many decades, the Supreme Court has recognized Congress’ authority, under the Commerce Clause, to regulate activities relating to interstate commerce. My advice from counsel is that we will win these — we will win these lawsuits.

JUDY WOODRUFF: There’s also pushback from within some of the state governments that are suing. Michigan Governor Jennifer Granholm, a Democrat, defended the health care reform law yesterday.

GOV. JENNIFER GRANHOLM, D-Mich.: I think so many people oppose it because they’re not sure what’s in it, and because, understandably, it is complicated.

JUDY WOODRUFF: And some in cash-strapped statehouses are wary of taking away the new health benefits or of funding a long legal battle when budgets are tight.

CEDRIC RICHMOND, D, Louisiana state representative: One, it’s not in the best interests of the state. Two, it won’t be successful. So, don’t waste our time and resources. And why don’t we let our Louisiana citizens start to benefit from this legislation?

JUDY WOODRUFF: The states’ lawsuits are expected to end up before the U.S. Supreme Court.

And we join that legal debate now with David Rivkin, a Washington, D.C., litigator and a former counsel with the Reagan and Bush administrations. He is assisting the 14 state attorneys general with their constitutional challenge. And Richard Cordray, Ohio’s attorney general, who this week announced that he believes these lawsuits have no merit.

Gentlemen, thank you both for being with us.

DAVID RIVKIN, former associate White House counsel: Good to be with you.

JUDY WOODRUFF: And, David Rivkin, I’m going to start with you, because you are representing the people who are putting the challenge forward.

As I understand it, two main arguments here, one of them is that you believe it’s unconstitutional to require people to buy insurance. Why is that unconstitutional?

DAVID RIVKIN: It’s unconstitutional both as a matter of fundamental principle and relevant case law.

As a matter of fundamental principle, the Constitution — a key aspect of our constitutional architecture is that the federal government is a government of limited and enumerative powers. That point was made by James Madison in The Federalist Papers, who said that the powers of the federal government are few and well-defined. The powers retained by the states are numerous and indefinite.

If you have an infinitely broad Commerce Clause under which Congress can legislate, it would absolutely eviscerate state authority to have any independent regulation. And there’s cases, very recent cases, 5-4 decisions, including Lopez, which struck down the violence — Gun Free School Zone Act, and Morrison, that struck down key portions of the Violence Against Women Act, that says very clearly in an opinion both written by O’Connor and Justice Kennedy, who’s still in the court.

JUDY WOODRUFF: These are recent cases before the court.

DAVID RIVKIN: Very recent cases that indicate that there have been to be meaningful limitations on the scope of Commerce Clause. Otherwise, it would follow the rest of the Constitution.

JUDY WOODRUFF: And you’re arguing that this requirement people buy insurance exceeds that requirement?

DAVID RIVKIN: Absolutely, because it doesn’t regulate economic activities.

JUDY WOODRUFF: Well, let me turn…

DAVID RIVKIN: It compels people to engage in behavior they do not desire.


All right, let me turn to Attorney General Cordray in Ohio.

Why do you believe that is not — that it is constitutional?

RICHARD CORDRAY, Ohio attorney general: Well, David is a topflight lawyer. I have read what he’s written on the subject. And he makes very creative arguments.

But you would have to find activist judges willing to tear up decades of settled precedent for these claims to succeed. The reality is that, for 70 years, since the Depression, the court has been very permissive in terms of letting Congress regulate interstate commerce.

And, of course, many things have become interstate national commercial problems, such as health insurance, which is a national market, and something that can’t be regulated very well on a piecemeal basis, which is why Congress stepped in here.

JUDY WOODRUFF: All right. If that’s the case…

DAVID RIVKIN: All right. Two points.

Nobody disputes that Congress can regulate the market, business of buying insurance, the terms of insurance, the conditions of insurance. What we’re talking about here, though, is compelling people to purchase something they do not desire, merely because it has an economic footprint.

But let me reiterate the point powerfully articulated by Justice Kennedy, who is likely to be the swing justice here. There have to be meaningful limitations under the Commerce Clause. If you say, as my colleague General Cordray says, that because a failure to purchase insurance has an economic impact, there’s literally no activity known to man that wouldn’t have some economic impact that, in the aggregate, would impact interstate commerce.

It has to be an activity. In both…

JUDY WOODRUFF: So, it — so, you’re saying it boils down, at least in part, to whether this is an economic activity requiring…

DAVID RIVKIN: As distinct from something — as distinct from something that has an impact. In the two leading cases…

JUDY WOODRUFF: But let me — let me just turn back to the attorney general, Mr. Cordray.

Can you respond to that particular part of his argument?


The court has said clearly that, if an activity has significant economic impact — such as, in 2005, the court upheld Congress’ ability to prohibit someone from growing and using marijuana for their personal use, no economic transaction whatsoever, but they said it could affect the marketplace — that’s good enough to be part of the Commerce Clause.

The other point is, David says that you can’t compel someone to buy a product or to pay for health insurance. But, in fact, the first Congress — James Madison was part of it — passed a bill that required anybody who was going to serve in a militia to purchase a gun, gunpowder, knapsack, and — and ammunition to be able to serve.

And then, in 1798, the Congress, with many of those same founders in it, passed a relief act for injured sailors which required them to pay out of their wages toward a rudimentary form of health insurance before there were any insurance companies.

So, this is longstanding historical precedent for this sort of thing.

JUDY WOODRUFF: You want to…

RICHARD CORDRAY: And, in fact, I think the arguments are quite out of step with modern jurisprudence.

JUDY WOODRUFF: You want to respond to that very quickly? And then I want to get to the other argument you’re making.

DAVID RIVKIN: Very quickly, in Gonzales vs. Raich, the activity involved, growing marijuana at home in a bathtub for personal consumption, had no profit motive. But it was the same activity as growing marijuana plantation-type setting, interstate, in parks and selling it.

The same was true in the wheat case, Wickard v. Filburn. Before you aggregate — where General Cordray is wrong, before you aggregate the impact, it has to be an economic activity, not necessarily one with a profit motive, but an economic activity.

And, again, what he does…


DAVID RIVKIN: … he reads out of existence Lopez and Morrison, which is ’95 and 2000 case, where the court said very clearly there have to be meaningful limitations.

JUDY WOODRUFF: So, clearly, this is going to come down to case law, precedent, interpretation of the Commerce Clause.

Let me ask you, though, both of you, quickly, though, about the other argument that you make, David Rivkin, and that is, it’s unconstitutional to require states to set up these insurance exchanges for people who don’t have insurance.

Can you briefly explain to us why?


There’s a whole line of cases that is basically rooted in the 10th Amendment that talks about states, again, retaining viable independent authority which stands for (INAUDIBLE) opposition and it’s called New York vs. United States — the other case is called Printz — where you cannot co-opt states.

You cannot commandeer, which is a term of art, state officials to perform tasks for the federal government. That’s a very well established line of cases. Aside from insurance exchanges, this statute would compel Florida and other states to spend billions of dollars of their limited resources, taking them away from environmental protection, taking them away from — from schools.

That is not — even if you didn’t have a mandate, that part of a statute alone is clearly unconstitutional.

JUDY WOODRUFF: OK, well, then it’s two points. But — so, let me come back to the requirement, Mr. Cordray, that states set up these insurance exchanges for individuals who don’t now have insurance.

RICHARD CORDRAY: Yes, I agree with David there on the case law, but that’s not, in fact, what this legislation does.

It doesn’t require the states to set up the exchanges. It gives them an option. They can set up the exchanges. If they don’t, the federal government then has the responsibility to step in and set those up itself. And that’s how the bill operates, very similar to the Medicaid program. That’s a voluntary program. All the states participate.

They don’t have to. If they do, they get federal funding and they cooperate with the federal government in the program. That’s the spending David’s talking about. It’s the Medicaid program. And states have the option to participate or not as they please. They typically find it beneficial to their citizens, and so they do so.

DAVID RIVKIN: Very important to underscore, Medicaid began as a voluntary effort. We would argue and are arguing that, at this point in time, you can not opt out of Medicaid. It is not a viable choice for any responsible government.

Why? It would absolutely destroy the infrastructure.

JUDY WOODRUFF: But there’s not a — but that’s not a change in this law.


JUDY WOODRUFF: They’re expanding the number of people who would be eligible for Medicaid.

DAVID RIVKIN: With respect, they’re changing Medicaid in a way that would swamp Medicaid rolls, costing billions of dollars — quite aside from insurance exchanges — costing billions of dollars in state revenue — and, remember, states cannot print money, like the federal government — having the states hire thousands of people to administer it.


DAVID RIVKIN: Large chunks of a state, of this whole regulatory edifice, cannot be opted out of.


Mr. Cordray, do you want to respond to that?

RICHARD CORDRAY: Yes, I understand. Sure.

I understand the argument, but I think you’re right, Judy, to point out the argument is one that the Medicaid program itself now is unconstitutional, because states really, effectively, need to participate in it.

But why do they need to participate if it? Because they realize that it’s helpful and useful to their citizens. They don’t really think they could do without it. But that’s a — that means they’re all making the same choice. It doesn’t mean they don’t have a choice.

JUDY WOODRUFF: Finally, to David Rivkin, what one hears about many of the legal opponents is that, truly, what this is all about is an opposition to health care reform, and this is just another way of trying to undermine it.

DAVID RIVKIN: This is unfortunate. There are many worthwhile policy causes, including carrying guns near schools, after 9/11, increasing our ability to surveil the enemy, where, no matter how meritorious your policy goals are, you have to make sure you do it in a way that is consistent with our constitutional architecture.

This is the American way. I, frankly, don’t understand the argument that, because health care reform is a good thing, which I would stipulate, that challenging it somehow is wrong. These are serious arguments.

The Washington Post editorial page, which is hardly known…

JUDY WOODRUFF: And you said you believe health care reform is a good thing?

DAVID RIVKIN: Of course. It’s the question of how it’s being done from a constitutional perspective.

Let me just say, Washington Post editorial page, that is not liberal at all, said, it’s a serious lawsuit; it has merit; it ought to be seriously considered.

JUDY WOODRUFF: And, Attorney General, Mr. Cordray, what about this notion this, whatever the merits, it must be challenged on these legal points?

RICHARD CORDRAY: Well, we work very hard in the courts to protect the states’ rights. We were in the Supreme Court week before last protecting our revenue system against the federal courts.

I argued a case personally last fall protecting our criminal justice system against what we thought was a misguided federal ruling that upset a death sentence. But the bottom line is, in many cases, these are policy disagreements. They’re deeply held. They’re — they’re very emotionally held, but those things should be hammered out in the political arena.

We shouldn’t run to the courts and bring litigation to solve these problems. And we don’t think this is a good use of taxpayer resources here in Ohio.

JUDY WOODRUFF: Richard Cordray, who is the attorney general for the state of Ohio, David Rivkin here in Washington, gentlemen, we appreciate it.

Thank you both.

DAVID RIVKIN: Good to be with you.